The premium price makes the “race” for registration “fair” and I think it has been successful in that respect.
A side effect of ENS receiving premium fees allows the DAO to distribute neglected names at 0 net cost. There was some prior discussion about this.
Like gas fees, the premium could be burnt, but that only makes sense when there’s no clear way to allocate resources. ENS has a DAO and so far seems like a reasonable way to manage a vibrant community and fund future protocol improvements.
The premium could be used to buy back $ENS (which is then burnt) but that just seems like more complexity, weird games, and legal issues.
Funds collected through premium could be used to subsidize temporary perks or incentives, like registrations beyond a certain duration get 1 year free, or “renewal week”, or fund quests through various crypto exposure programs to increase awareness.
I disagree with allocating the premium fee to the previous owner as that introduces weird incentives. Additionally, you could just extend the name and sell it yourself.
I think that last point is really the crux of the issue: the official ENS registration app does not support a standard way to indicate that your name is for sale and/or that you’d be willing to sell/trade/etc.
I don’t think the manager should be a marketplace, but I think there’s some design space for name suggestions, “external availability”, similar names for sale, market place pricing, how to contact the owner, etc. that, if done tastefully, benefit everyone involved.